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The Growth Of Flexible Workspace In Israel

byCecilia Amador de San José
September 3, 2019
in Business
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Demand for flexible workspace in Israel doubled last year, according to the Instant Group.

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  • Instant Group’s “Israel Goes Mainstream” report finds high demand for flexible workspace across Israel through 2018.
  • Demand doubled in 2018 with interest growing in new markets, alongside the more established markets of Tel Aviv, Jerusalem and Haifa.
  • While still a relatively small market, nearly 97% of office spaces in Israel offer some form of flexible space – one of the highest figures of any country globally.

The Instant Group recently published the report “Israel Goes Mainstream: The Growth of Flexible Workspace”, which reports extremely high demand for flexible workspace across the Israeli market through 2018. 

According to Instant Group’s data, “demand for flexible space in Israel via the Instant platform doubled year on year in 2018 with interest growing in new markets such as Herzliya and Ramat-Gan, alongside the more established markets of Tel Aviv, Jerusalem and Haifa.” Not only have searches for flexible space increased, but also the data shows that clients searching for flexible space have increased their average requirement size to 10+ workstations, which Instant reports is “the highest in the region.”

Instant has 40 flexible workspace locations mapped out in Israel, meaning the market is still relatively small, therefore it has a significant growth potential. And the market is indeed growing at a considerable pace. This growth is being driven, in large part, to Israel’s booming tech and consulting sectors; but this is changing as well. 

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“While both Tech and Consulting firms still lead from a demand point of view, we have seen an increase in interest from Financial and Business Process organisations over the last year alongside the ever present Freelancer community.”

This means that the Israeli market is following the path of other more mature markets, suggesting that the variety of companies using flexible workspace will evolve, and so will space offerings.

However, as has happened in other markets, rates will potentially decrease as more operators enter the industry. In 2017 alone, over 20% of space let was to flexible workspace operators according to data from Cushman & Wakefield. More recently, Instant claims that the expansion of several flexible workspace operators has dominated the occupancy of 500,000 square meters (5,381,955 sq ft) of additional office space in the market. 

Flexible workspace offers have increased, but so has demand for it. “Thanks to the strong influence of start-up companies within the country, the majority of spaces offer some form of flexible working – at present nearly 97% of tracked locations offer coworking, one of the highest figures of any country globally.”

In Tel Aviv specifically, the demand for flexible space continues to drive the market and the city currently out-performs the wider country with nearly 100% occupancy reported. As for emerging Israeli markets, including Herzliya, Jerusalem, Or Yehuda and Petah Tikva, both demand and offer is expected to increase. In these cities, demand is currently dominated by smaller teams or individuals, “but it is likely that this will develop to larger companies and corporates as we have seen in more developed markets.”

Compared to London, New York or San Francisco, the overall costs are much lower even in Tel Aviv for both office space and talent. Combined with the high volume of graduates and skilled workers, Israel is becoming increasingly popular for tech companies in particular. New building projects are underway or have recently been completed in Tel Aviv and this is expected to cause a slight decrease in rates over the coming twelve months.

Notable Flexible  Workspace Operators in the Region

Mindspace
Mindspace has raised over $35 million since it was founded in 2014. The coworking space operator currently has locations in Washington D.C., San Francisco, London, Berlin, Munich, Hamburg, Tel Aviv, and Warsaw. 

Mixer Work & Lounge
Mixer is one of Israel’s largest coworking space operators. The company operates three coworking spaces in Israel, two in Tel Aviv and one in Herzliya, and it recently announced plans to expand into the US market with an upcoming location in Washington D.C. 

WeWork
The coworking behemoth currently operates nine coworking space locations across five Israeli cities: Tel Aviv, Haifa, Be’er Sheva, Herzliya, and Jerusalem. 

Urban Place
Urban Place is a boutique coworking space operator that was founded in 2014 and currently operates coworking spaces in Silicon Wadi, Tel Aviv, Jerusalem, and Paris. The company is reportedly seeking to expand its coworking footprint to Be’er Sheva, Herzliya, and Ra’anana. 

Panthera
Founded in 2017, Panthera is Israel’s first female-focused coworking space and club. Prior to the company’s launch, its founders raised approximately $1.7 million  from venture capitalist Fiona Darmon and other women investors. Panthera reportedly has plans to expand its presence in Israel and Europe.

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Cecilia Amador de San José

Cecilia Amador de San José

Cecilia Amador de San José, Senior Associate Editor of Allwork.Space, is based from wherever her laptop is. She enjoys traveling and visiting new flexible workspaces.

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